Uncollectible accounts receivable uncollectible

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Unformatted text preview: nting for Uncollectible Accounts Direct Write-Off Method Theoretically undesirable: No matching Receivable not stated at net realizable value (NRV) Not allowed by GAAP if amount is material Chapter 7-27 Allowance Method(s) Losses are Estimated using: Percentage­of­sales (I/S) OR Percentage­of­A/R (B/S) Both are GAAP approved Both are better matching than Direct Write-Off LO 5 Explain accounting issues related to valuation of accounts receivable. Uncollectible Accounts Receivable Uncollectible Accounts Receivable Income Income Statement Statement Approach Approach ((usesI/S uses I/S accounts) accounts) Balance Balance Sheet Sheet Approach Approach ((usesB/S uses B/S accounts) accounts) Chapter 7-28 LO 5 Explain accounting issues related to valuation of accounts receivable. Uncollectible Accounts Receivable Uncollectible Accounts Receivable Percentage-of-Sales Approach Percentage-of-Sales Approach Income statement approach (uses I/S accounts) Achieves proper matching because it relates the expense to period in which company records the sale Ap...
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This note was uploaded on 01/29/2013 for the course ACC 223 taught by Professor Staff during the Fall '12 term at Niagara University.

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